End of Legislative Session Report - Vol. 1
We set out the legislative session with the following priorities:
- Create a gradual pathway out from the eviction moratorium, towards recovery that returns full managerial operations to property owners and managers.
- Provide rental assistance to overcome the financial burdens imposed on housing providers and residents by the COVID-19 pandemic.
- Prevent the burden of rent control from reordering the rental housing market and discouraging future investment in rental housing.
- Advance policies that create more housing development.
Given the unprecedented nature of the pandemic we faced often choppy, uncharted waters. The WMFHA Government Affairs team stayed the course and succeeded in obtaining some critical victories. Over the course of the next few days, we will highlight priority legislation defeated or passed during the 2021 session.
Between January and the end of March, WMFHA landed 19 stories in local media across the state. This averages more than one placement a week in the media.
The WMFHA team defeated two efforts to implement rent control. The first, a “short-term” COVID recovery rent control bill would have capped rents at 3 percent plus CPI, regardless of COVID impact. Senate Bill 5139 did not receive a vote in its committee of origin and was considered defeated early in the session.
Second, a bill that would implement rent control whenever there is a state of emergency made its way to the last day of the session. Though we worked hard to carve out rental housing, and succeeded in doing so, there were efforts to remove such a carve out and return a cap on rental housing.
The legislation, billed as anti-price gouging, would have applied substantial penalties whenever the rent increased by more than 15 percent during a state of emergency. The State of Washington implements states of emergency all the time for issues that do not pose a direct economic threat to stability, and this law would have been applied to each and every state of emergency, sometimes extending for years.
We’ve seen how rent control policies defeat the ability to provide quality, affordable rental housing: Rent Control in Berlin Fails.
Capital Gains Tax
Despite the Washington Constitution preventing a tax on income, the legislature passed a “high-earners” capital gains tax. WMFHA worked with many industry partners to preserve an exemption for real estate and the final language exempts “all real estate transferred by deed, real estate contract, judgment, or other lawful instruments that transfer title to real property and are filed as a public record with the counties where real property is located.”
The 7 percent tax is imposed on individuals who sell or exchange long-term (<1 year) capital assets exceeding $250,000.
WMFHA secured an enormous amount of rental assistance to support the rental housing industry and its residents:
- $140 million in State CARES Act General Relief Funds
- $920 million in federal rental assistance in Washington
- $658 million in APRA General Relief Funds for additional rental assistance
- $58 million in operations and maintenance assistance for Permanently Supportive Housing
- $11.6 million in additional investment towards the Landlord Mitigation Fund
- $220.4 million in permanent rental assistance to assist those experiencing homelessness and those at risk of becoming homeless.
For small independent housing providers, WMFHA secured opportunities to engage in the already successful foreclosure prevention programs that exists for primary-residence homeowners.
Senate Bill 5160 provides the off-ramp from the eviction moratorium and towards recovery. More on this tomorrow.
Senate Bill 1236 implements requirements on housing providers to provide a reason to terminate a tenancy. More on this on Thursday.
Finally, the Multi-Family Tax Exemption (MFTE) was expanded and extended. A summary of the changes will be available on our website shortly.